March 27 (Bloomberg) -- PT Astra Agro Lestari and Kuala Lumpur Kepong Bhd. led gains among plantation companies in Indonesia and Malaysia after palm oil futures jumped.

Astra Agro, Indonesia’s biggest agricultural company by value, jumped 5.2 percent to 14,200 rupiah in Jakarta trading, while the benchmark index rose 2.8 percent. Kuala Lumpur Kepong climbed 0.9 percent to 10.80 ringgit in Malaysia, versus a 0.1 decline gain in the local index. Palm oil prices surged 3.2 percent in Malaysia yesterday, the biggest gain in a week.

Palm oil prices have gained 20 percent this year amid a rebound in crude oil. Prices may advance further as farmers disrupt sales of grain and livestock in Argentina, the world’s third-largest soybean producer, to protest export taxes, bolstering demand for alternative fuels, Royal Bank of Scotland Group Plc predicted.

“We expect this to cause a bull run in palm oil prices, given palm oil is a close substitute for soybean oil,” Nirgunan Tiruchelvam, a Singapore-based analyst at Royal Bank of Scotland, wrote in a report today. “We expect the productivity of palm oil plantations in Malaysia and Indonesia to decline as a result of poor weather and lower fertilizer use.”

PT Perusahaan Perkebunan London Sumatra Indonesia, the nation’s second-biggest listed plantation company, rose 2.9 percent to 3,550 rupiah. Sime Darby Bhd., the world’s biggest palm-oil producer, gained 0.9 percent in Kuala Lumpur.

To contact the reporter on this story: Tien Hin Chan at thchan@bloomberg.net; Shiyin Chen in Singapore at schen37@bloomberg.net

Last Updated: March 27, 2009 00:19 EDT